Air Costa grounds flights, delays January salaries
Air Costa, which said on Tuesday that it is suspending its operations temporarily, has also not paid salaries for January.
The regional airline’s two planes were impounded by aircraft lessor GE Capital Aviation Services (GECAS) on Monday after Air Costa defaulted on payments.
The airline has returned its third plane a few weeks back and is now left with none.
The employee said “January salaries are yet to come, and we are a little worried now.”
Air Costa has suspended operations for two days and is taking bookings from March 3 onwards, the airline’s spokesman said.
He added that salaries are paid by the 15th of the following month, admitted to a delay, but said they would be paid out soon.
The spokesman said the airline is in talks to arrange funds and has already spoken to GECAS about the subject.
It hopes to close some funding this week itself, he said.
Air Costa has about 600 employees mostly based out of Vijaywada, its HQ, and Jaipur, Ahmedabad, Hyderabad, Tirupati, Chennai, and Benagluru.
The airline uses Brazil-made Embraer planes and has ordered 50 which are to be delivered start ing next year.
Last August, the airline grounded operations because of similar financial issues with its lessor but restarted operations after few days.
“The last time was compara tively very tough but we came out of it,” the spokesman said. “We are very hopeful that funds wil come soon.”
Regional airlines have had a hard time in India in recent years even when they are backed by big business houses.
Religare Voyages Ltd, which runs Air Mantra, stopped opera tions eight months after its launch in 2013 because of poor bookings. Religare Voyages was promoted by brothers Malvinder Singh and Shivinder Singh.
MDLR Airlines Pvt Ltd, the only regional carrier that started operations in 2007, stopped flying in 2009. Star Aviation Pvt. Ltd ZAV Airways Pvt Ltd, Jagson Airlines Ltd and King Air Pvt Ltd were licensed to fly as regiona carriers, but none of them could launch because of high jet fue prices and the economic slow down of 2008.